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___________________________
SENTO CORPORATION
___________________________
1996
EMPLOYEE STOCK PURCHASE PLAN
(AMENDED AND RESTATED)
ARTICLE 1. THE PLAN
Sento Corporation, a Utah corporation (the "Company"), hereby amends and
restates its Sento Corporation 1996 Employee Stock Purchase Plan (Amended and
Restated) (the "Plan"), to provide a method whereby employees of the Company and
certain of its subsidiaries will have an opportunity to acquire a proprietary
interest in the Company through the purchase of shares of the $0.25 par value
Common Stock of the Company (the "Common Stock"). The Plan is intended to
qualify as an "employee stock purchase plan" under section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"). The provisions of the Plan shall
be construed so as to meet all of the requirements of such a plan under Code
section 423.
ARTICLE 2. DEFINITIONS
2.1 BASE PAY. "Base Pay" shall mean salary, wages or other regular rate
of pay before reduction for contributions to plans maintained under Code section
401(k) and 125 (such as profit-sharing and cafeteria plans), but excluding
overtime, bonuses, and other extraordinary forms of compensation, provided that
in no event shall Base Pay exceed $125,000 per year.
2.2 CODE. "Code" means the Internal Revenue Code of 1986, as amended.
2.3 COMMITTEE. "Committee" shall mean the committee described in Article
11.
2.4 COMMON STOCK. "Common Stock" means the $0.25 par value Common Stock
of the Company.
2.5 COMPANY. "Company" means Sento Corporation, a Utah corporation.
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2.6 ELIGIBLE EMPLOYEE. "Eligible Employee" shall have the meaning set
forth in Section 3.1.
2.7 EMPLOYEE. "Employee" shall mean any common-law employee of the
Company.
2.8 FAIR MARKET VALUE. "Fair Market Value" with respect to a share of
Common Stock shall mean the average of the high and low bid prices as quoted on
the Pink Sheets, the OTC Bulletin Board, or similar service, on the applicable
date (or the nearest prior business day on which such quotes are available if no
quotes are available on the applicable date), or if the Company's Common Stock
is listed on an exchange or automated quotation system, the "Fair Market Value"
shall be the closing sales price as reported on such exchange or automated
quotation system on the applicable date (or the nearest prior business day on
which shares of Common Stock traded if no shares of Common Stock traded on the
applicable date).
2.9 OFFERING. "Offering" shall have the meaning set forth in Section 4.1.
2.10 OFFERING COMMENCEMENT DATE. "Offering Commencement Date" means the
date on which the particular Offering begins as set forth in Section 4.1.
2.11 OFFERING TERMINATION DATE. "Offering Termination Date" means the date
on which the particular Offering terminates as set forth in Section 4.1.
2.12 OPTIONS. "Option" or "Options" mean the options that are deemed to be
granted to Eligible Employees pursuant to Section 5.1.
2.13 PLAN. "Plan" means the Sento Corporation 1996 Employee Stock Purchase
Plan (Amended and Restated).
2.14 SUBSIDIARY. "Subsidiary" shall mean any present or future corporation
which would be a "subsidiary corporation" with respect to the Company as that
term is defined in Code section 424. A Subsidiary's employees shall participate
in the Plan, however, only if the Subsidiary is designated as a participating
Subsidiary by the Committee. References in the Plan to employment by, or
periods of employment with, the Company include employment by or with all such
participating Subsidiaries, including during periods of employment prior to such
participation.
ARTICLE 3. ELIGIBILITY AND PARTICIPATION
3.1 INITIAL ELIGIBILITY. Any Employee who has completed 90 days'
employment by the Company and shall be employed by the Company on the applicable
Offering
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Commencement Date (an "Eligible Employee") shall be eligible to
participate in such Offering. Whether or not an Employee participates in any
Offering will not have any effect on eligibility in subsequent Offerings.
3.2 RESTRICTIONS ON PARTICIPATION. Notwithstanding any other Plan
provision to the contrary, no Employee shall be granted an Option to purchase
Common Stock under the Plan:
(a) if, immediately after the grant, such Employee would own stock,
and/or hold outstanding options to purchase stock, possessing 5% or more of the
total combined voting power or value of all classes of stock of the Company or
of any Subsidiary (for purposes of this paragraph, the rules of section 424(d)
of the Code shall apply in determining stock ownership of any employee); or
(b) which permits the Employee's rights to purchase stock under all
employee stock purchase plans of the Company or any of its Subsidiaries to
accrue at a rate which exceeds $25,000 in fair market value of the stock
(determined at the time such option is granted) for each calendar year in which
such option is at any time outstanding.
ARTICLE 4. OFFERINGS
4.1 OFFERINGS. The Plan will be implemented by semi-annual offerings of
Common Stock. In each year until the termination of the Plan on September 30,
2009, an offering shall commence on April 1st and end on September 30th, and a
second offering shall commence on October 1st and end on the following March
31st. Each such six-month offering is referred to in the Plan as an "Offering."
As long as the number of shares issued under the Plan does not exceed the
Maximum Number (defined in Section 10.1), there shall be no maximum number of
shares issuable in each respective Offering.
ARTICLE 5. GRANTING OF OPTIONS
5.1 NUMBER OF OPTION SHARES.
(a) On the applicable Offering Commencement Date, each Eligible
Employee who has filed with the Company an Authorization described in Section
6.1 shall be deemed to have been granted an Option to purchase a maximum number
of shares of Common Stock equal to an amount determined as follows: an amount
equal to (i) 15% multiplied by (ii) the Eligible Employee's projected Base Pay
for the applicable Offering Period, and (iii) divided by 85% of the Fair Market
Value of the Common Stock on the applicable Offering Commencement Date. Such
Option shall only be exercisable on the Offering Termination Date.
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(b) An Eligible Employee's projected Base Pay for an Offering Period
shall be determined by multiplying his or her normal bi-weekly rate of Base Pay
(as in effect on the last day prior to the Commencement Date of the Offering) by
26 or the hourly rate by 1,040; provided that, in the case of a part-time hourly
employee, the Eligible Employee's projected Base Pay during the Offering Period
shall be determined by multiplying such Eligible Employee's hourly rate by the
number of regularly scheduled hours of work for such Eligible Employee during
such Offering. Notwithstanding anything to the contrary in this Plan, Base Pay
shall in no event exceed $125,000 per year.
5.2 OPTION PRICE. The exercise price of the Options shall be the lower
of:
(a) 85% of the Fair Market Value of Common Stock on the applicable
Offering Commencement Date; or
(b) 85% of the Fair Market Value of Common Stock on the applicable
Offering Termination Date.
ARTICLE 6. PAYROLL DEDUCTIONS
6.1 AMOUNT OF DEDUCTION. In order to participate in any Offering, an
Eligible Employee must file, before the applicable Offering Commencement Date,
an authorization in the form attached hereto as EXHIBIT A, (a) electing to
participate in the respective Offering, (b) designating the amount (on a
percentage basis) of the Employee's Base Pay the Employee desires to have
deducted and applied toward to exercise price of the Option granted to the
Employee under Section 5.1, and (c) authorizing the Company to deduct the
designated amount (on a percentage basis) of the Employee's Base Pay and apply
it toward the exercise price of the Option granted to the Employee under Section
5.1 (an "Authorization"). Such deductions shall be made from an Employee's pay
on each payday during the time the Employee is a participant in an Offering at
the rate designated by the Employee but not more than 15% of the Employee's Base
Pay.
6.2 EMPLOYEE'S ACCOUNT. All payroll deductions made for an Employee shall
be credited to an account for the Employee under the Plan. An Employee may not
make separate cash payments into such account.
6.3 CHANGES IN PAYROLL DEDUCTIONS. An Employee may discontinue his or her
payroll deductions during an Offering as provided in Article 8, but no other
changes can be made during an Offering and, specifically, an Employee may not
alter the amount of payroll deductions for that Offering.
6.4 WITHDRAWAL OF ACCOUNT. By written notice to the Human Resources
Department of the Company, at any time prior to the Offering Termination Date
applicable to any Offering, an Employee who has elected to pay the exercise
price of the Option through
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payroll deduction may elect to terminate his or her
participation in the current Offering and withdraw all the accumulated payroll
deductions credited to his or her account at such time.
ARTICLE 7. EXERCISE OF OPTION
7.1 EXERCISE. An Employee's Option to purchase Common Stock will be
deemed to have been exercised automatically on the Offering Termination Date
applicable to such Offering unless the Employee gives written notice to the
Company to withdraw such payroll deductions as hereinafter provided. The Option
will be deemed to have been exercised for the purchase of the number of full
shares of Common Stock which the accumulated payroll deductions in his or her
account at that time will purchase at the applicable exercise price (but not in
excess of the number of shares for which Options have been granted to the
Employee pursuant to Section 5.1), and any excess in his or her account at that
time will be returned to the Employee.
7.2 FRACTIONAL SHARES. Fractional shares will not be issued under the
Plan and the Company, at the sole election of the Committee, may elect either
(i) to return any accumulated payroll deductions, contributions or payments
which would have been used to purchase fractional shares to the Employees, or
(ii) to issue the next largest whole number of shares of Common Stock.
7.3 TRANSFERABILITY OF OPTION. During an Employee's lifetime, Options
held by such Employee shall be exercisable only by that Employee.
7.4 DELIVERY OF STOCK. As promptly as practicable after the Offering
Termination Date of each Offering, the Company shall, subject to the
restrictions described in Section 10.4, at the election of each Employee who has
exercised an Option, (i) cause the Company's transfer agent to electronically
transfer, in such Employee's name, the shares of Common Stock purchased upon
exercise of such Employee's Option to a broker designated by the Company to
facilitate prompt sale of such securities, or (ii) cause the Company's transfer
agent to deliver to such Employee the shares of Common Stock purchased upon
exercise of such Employee's Option.
ARTICLE 8. WITHDRAWAL
8.1 IN GENERAL. As indicated in Section 6.4, an Employee may withdraw
payroll deductions credited to his or her account under the Plan at any time by
giving written notice to the Human Resources Department of the Company. All of
the Employee's payroll deductions credited to his or her account will be paid to
him or her promptly after receipt of his or her notice of withdrawal, and no
further payroll deductions will be made from his or her pay during such
Offering. The Company may, at its option, treat any attempt to borrow
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by an Employee on the security of his or her accumulated payroll deductions as
an election, under Section 6.4, to withdraw such deductions.
8.2 NON-EXERCISE OF OPTIONS. An Employee shall have no obligation to
exercise an Option. If an Eligible Employee has withdrawn his or her payroll
deductions prior to the Offering Termination Date, then the Eligible Employee
shall be deemed to have elected not to exercise such Option, and the Option
granted to such Eligible Employee for such Offering shall terminate and the
Eligible Employee shall have no further rights with respect to such Option. If
the amount of payroll deductions credited to an Employee's account are
insufficient to purchase the maximum number of shares issuable upon exercise of
the Option, the Option will be deemed to have been exercised only for such
number of shares as can be purchased with the payroll deductions credited to the
Employee's account, and all other rights to purchase the remaining shares
issuable pursuant to the Option shall terminate.
8.3 EFFECT ON SUBSEQUENT PARTICIPATION. An Employee's withdrawal of
payroll deductions (which will be deemed to be an election not to exercise the
Option granting during the applicable Offering) will not have any effect upon
his or her eligibility to participate in any succeeding Offering or in any
similar plan which may hereafter be adopted by the Company.
8.4 TERMINATION OF EMPLOYMENT. Upon termination of an Eligible Employee's
employment for any reason including retirement and death, the Option granted to
such Employee shall immediately terminate in its entirety, and the payroll
deductions or other contributions credited to the Employee's account will be
returned to the Employee, or, in the case of the death of the Employee, to the
person or persons entitled thereto under Section 12.1. An Employee's employment
shall not be considered terminated in the case of a leave of absence agreed to
in writing by the Company, provided that such leave of absence is for a period
of not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
ARTICLE 9. INTEREST
9.1 PAYMENT OF INTEREST. No interest will be paid or allowed on any money
credited to the account of any Employee.
ARTICLE 10. STOCK
10.1 MAXIMUM SHARES. The maximum number of shares which may be issued in
all Offerings under the Plan, subject to adjustment upon changes in
capitalization of the Company as provided in Section 12.4, shall be 200,000
shares of Common Stock (the "Maximum Number"). If the total number of shares
for which Options are to be granted on
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any Offering Commencement Date in accordance with Article 5 exceeds the
maximum number of shares for the applicable Offering, the Company shall make
a pro-rata allocation of the shares available for issuance in as nearly a
uniform manner as shall be practicable and as it shall determine to be
equitable.
10.2 EMPLOYEE'S INTEREST IN OPTION STOCK. An Employee will have no
interest in stock covered by Options until such Options have been exercised.
10.3 REGISTRATION OF STOCK. Common Stock to be delivered to an Employee
under the Plan will be registered in the name of the Employee, or, if the
Employee so directs by written notice to the Human Resources Department of
the Company prior to the Offering Termination Date applicable thereto, in the
names of the Employee and one such other person as may be designated by the
Employee, as joint tenants with rights of survivorship.
10.4 RESTRICTIONS ON EXERCISE. The Board of Directors may, in its
discretion, require as conditions to the exercise of any Option that the
shares of Common Stock reserved for issuance upon the exercise of the Option
shall have been duly listed, upon official notice of issuance, upon a stock
exchange or automated quotation system, if applicable, and that either:
(a) a Registration Statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective, or
(b) the Employee shall have represented at the time of purchase, in
form and substance satisfactory to the Company, that it is his or her intention
to purchase the shares for investment and not for resale or distribution.
ARTICLE 11. ADMINISTRATION
11.1 APPOINTMENT OF COMMITTEE. The Board of Directors shall appoint a
committee (the "Committee") to administer the Plan; provided that during any
period of time a Committee has not been appointed by the Board of Directors, the
Board of Directors shall be deemed to be the Committee.
11.2 AUTHORITY OF COMMITTEE. Subject to the express provisions of the
Plan, the Committee shall have plenary authority in its discretion to interpret
and construe any and all provisions of the Plan, to adopt rules and regulations
for administering the Plan, to appoint custodians, accountants and other
advisors, and to make all other determinations deemed necessary or advisable for
administrating the Plan. The Committee's determination on the foregoing matters
shall be conclusive.
11.3 RULES GOVERNING THE ADMINISTRATION OF THE COMMITTEE. The Board of
Directors may from time to time appoint members of the Committee in substitution
for or in addition to members previously appointed and may fill vacancies,
however caused, in the Committee.
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The Committee may select one of its members as its Chairman and shall hold
its meetings at such times and places as it shall deem advisable and may hold
telephonic meetings. A majority of its members shall constitute a quorum.
All determinations of the Committee shall be made by a majority of its
members. The Committee may correct any defect or omission or reconcile any
inconsistency in the Plan, in the manner and to the extent it shall deem
desirable. Any decision or determination reduced to writing and signed by a
majority of the members of the Committee shall be as fully effective as if it
had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a secretary and shall make such rules and regulations
for the conduct of its business as it shall deem advisable.
ARTICLE 12. MISCELLANEOUS
12.1 DESIGNATION OF BENEFICIARY. An Employee may file with the Human
Resources Department of the Company, a written designation of a beneficiary who
is to receive any cash under the Plan upon the Employee's death. Such
beneficiary designation may be changed by the Employee at any time by written
notice to the Human Resources Department of the Company. Upon the death of an
Employee and upon receipt by the Company of proof of the identity and existence
at the Employee's death of a beneficiary validly designated by him or her under
the Plan, the Company shall deliver such cash to such beneficiary as may have
been deducted from the Employee's pay under the Plan which has not been used to
acquire shares of Common Stock under the Plan. Upon the death of an Employee
and in the absence of a validly designated surviving beneficiary, the Company
shall deliver such cash to the executor or administrator of the deceased
Employee's estate, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such cash to the spouse or to any one or more dependents of the deceased
Employee as the Company may designate. No beneficiary shall, prior to the death
of the Employee by whom he or she has been designated, acquire any interest in
the cash credited to the Employee's account under the Plan.
12.2 TRANSFERABILITY. Neither payroll deductions credited to an Employee's
account nor any rights with regard to the exercise of an Option or to receive
stock under the Plan may be assigned, transferred, pledged, or otherwise
disposed of in any way by the Employee other than by will or the laws of descent
and distribution. Any such attempted assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such act
as an election to withdraw funds in accordance with Section 6.4.
12.3 USE OF FUNDS. All payroll deductions received or held by the Company
under this Plan may be used by the Company for any corporate purpose and the
Company shall not be obligated to segregate such payroll deductions.
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12.4 ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) If, while any Options are outstanding, the outstanding shares of
Common Stock are increased, decreased, changed into, or exchanged for a
different number or kind of shares or securities of the Company through
reorganization, merger, recapitalization, reclassification, stock split, reverse
stock split or similar transaction, appropriate and proportionate adjustments
may be made by the Committee in the number and/or kind of shares which are
subject to purchase under outstanding Options and in the Option exercise price
or prices applicable to such outstanding Options. In addition, in any such
event, the Maximum Number of shares subject to the Plan shall be proportionately
adjusted. No adjustments shall be made, however, for stock dividends. For
purposes of this paragraph (a), any distribution of shares to shareholders in an
amount aggregating 20% or more of the outstanding shares shall be deemed a stock
split and any distributions of shares aggregating less than 20% of the
outstanding shares shall be deemed a stock dividend.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all of the property or stock of the Company to
another corporation, the holder of each Option then outstanding under the Plan
will thereafter be entitled to receive at the next Offering Termination Date
upon the exercise of such Option for each share as to which such Option shall be
exercised, as nearly as reasonably may be determined, the cash, securities
and/or property which a holder of one share of the Common Stock was entitled to
receive upon and at the time of such transaction. The Board of Directors shall
take such steps in connection with such transactions as the Board shall deem
necessary to assure that the provisions of this Section 12.4 shall thereafter be
applicable, as nearly as reasonably may be determined, in relation to the said
cash, securities and/or property as to which such holder of such Option might
thereafter be entitled to receive.
12.5 AMENDMENT AND TERMINATION. The Board of Directors shall have complete
power and authority to terminate or amend the Plan; provided, however, that the
Board of Directors shall not, without the approval of the stockholders of the
Corporation (a) increase the maximum number of shares which may be issued under
any Offering (except pursuant to Section 12.4); or (b) amend the requirements as
to the class of employees eligible to purchase stock under the Plan or permit
the members of the Committee to purchase stock under the Plan. No termination,
modification, or amendment of the Plan may, without the consent of an Employee
then having an Option under the Plan to purchase Common Stock, adversely affect
the rights of such Employee under such Option.
12.6 EFFECTIVE DATE. The Plan has been approved by the Board of Directors
and adopted by the Company on April 18, 1996, effective as of such date,
subject, however, to approval by the stockholders of the Company or at special
or annual meeting of the
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stockholders held within 12 months after the Plan's adoption date. If the
Plan is not so approved, the Plan shall not become effective. Offerings may
commence, however, prior to stockholder approval, but no Options may be
exercised until after such approval.
12.7 NO EMPLOYMENT RIGHTS. The Plan does not, directly or indirectly,
create any right for the benefit of any Employee or class of Employees to
purchase any shares under the Plan, or create in any Employee or class of
Employees any right with respect to continuation of employment by the Company or
any Subsidiary, and it shall not be deemed to interfere in any way with the
Company's or any Subsidiary's right to terminate, or otherwise modify, an
Employees' employment at any time.
12.8 EFFECT OF PLAN. The provisions of the Plan shall, in accordance with
its terms, be binding upon, and inure to the benefit of, all successors of each
Employee in the Plan, including, without limitation, such Employee's estate and
the executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such employee.
ARTICLE 13. EXECUTION
The Plan having been adopted on April 18th, 1996, in order to record the
amendments set forth herein to restate the Plan as set forth above, the Company
has caused its duly authorized officer to execute this Plan document as of the
___ of September, 1999.
SENTO CORPORATION.
By:
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Its:
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EXHIBIT A
AUTHORIZATION AND ELECTION
Pursuant to the Sento Corporation 1996 Employ Stock Purchase Plan (Amended
and Restated) (the "Plan), I, the undersigned employee of Sento Corporation (the
"Company"), hereby:
(a) elect to participate in the semi-annual Offering under the Plan
commencing on October 1 / April 1 (CIRCLE THAT WHICH APPLIES), __________
(INSERT YEAR) and continuing for six months until the following March 31st /
September 30th;
(b) unless I deliver a notice to the Human Resources Department of the
Company prior to the applicable Offering Termination Date electing to terminate
my participation in such Offering and to withdraw all accumulated payroll
deductions credited to my account at that time, authorize and direct the Company
to deduct from each of my bi-weekly paychecks an amount equal to ________
percent (SPECIFY A PERCENTAGE NO GREATER THAN 15%) of my Base Pay and credit
such amounts to an account in my name under the Plan; and
(c) unless I deliver a notice to the Human Resources Department of the
Company prior to the applicable Offering Termination Date electing to terminate
my participation in such Offering and to withdraw all accumulated payroll
deductions credited to my account at that time, hereby authorize and direct the
Company to use such payroll deductions to purchase the number of full shares of
Common Stock which the accumulated payroll deductions on the Offering
Termination Date will purchase at the applicable exercise price (but not in
excess of the number of shares for which Options have been granted to me in
Section 5.1 of the Plan) and to return any excess accumulated payroll deductions
to me.
(d) certify that I have read and understood the Plan, agree to be bound by
the terms and conditions of the Plan, and understand that the capitalized terms
used, but not defined, in this Authorization and Election have the meanings set
forth in the Plan.
Dated this ___ day of _________, ______.
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(PRINT NAME)
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(SIGN HERE)
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